The old expression “There’s no such thing as a free lunch.” is most always true. Usually there is some catch involved, a hidden fee or an ulterior motive. Most people, at one time or another, have received an invitation to a “free” luncheon or dinner by an investment advisor, insurance salesman or what have you. Most claim to be selling nothing. If that were the case, why would they do it?

A few years ago, a friend of mine told me about a dinner seminar he had attended. He said the presenter had some very interesting investment opportunities and that I should attend one if I had the opportunity. About a week later, I received an invitation in the mail. My wife encouraged me to sign up, so I could see, firsthand, what one was like.

So my wife and I went. The dinner was just OK. The speaker was slick; I’ll give him that. He talked so fast, though, that it appeared he didn’t want anyone to ask any questions. I found myself being skeptical of everything he said.

His handouts indicated that he had been a member of the Certified Financial Planner® Board of Standards, yet he didn’t claim to be a Certified Financial Planner licensee. A later check on the Internet proved that he wasn’t. He showed up the next day at a Financial Planning Association (FPA) of Michigan luncheon. I reported him to another FPA member who had ties to the CFP Board.

A little over a year ago, I was not surprised to see that he was reportedly involved in a Ponzi scheme here in Oakland County! Of course, it’s not fair to judge all investment seminars or the presenters by my one experience. There are many honest advisors out there who hold investment seminars and have the attendee’s best interests at heart.

Nevertheless, if you do attend a “free-meal” seminar, you need to do your homework before signing up for any products or services. In a recent “Ask Encore” Wall Street Journal column, a reader asked: “Do you recommend ‘direct-participation programs’ for retirees?” (Note: direct-participation programs are typically used for investing in real estate investment trusts or REITs.) The reader had attended a presentation by a broker. The broker emphasized the return of 7% but didn’t mention the high commissions involved or the fact that direct-participation programs typically lack liquidity.

The article went on to say that: “Advice you get at seminars could be great or not so great. Securities regulators who examined a series of ‘free lunch’ seminars in 2006 and 2007 found that half of such seminars ‘featured exaggerated or misleading advertising claims and 23% involved ‘possibly unsuitable recommendations’.”

Again, we don’t want to paint all seminar presenters with the same brush. Just be sure to do some due diligence if you attend a “free-lunch” seminar. Otherwise, your lunch could be very expensive!